Food manufacturers in Australia are being “done over” by the country’s two supermarket giants Woolworths and Coles, according to the head of local independent retailers.
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John Cummings, chairman of the National Association of Retail Grocers of Australia, yesterday (26 March) a bitter attack on Woolworths and Coles, which account for around 80% of the country’s food retail sector.
Cummings accused the retailers of avoiding competition with each other, of blocking new entrants to the industry through property agreements and of forcing smaller suppliers out of business.
“Woolworths and Coles market share in Australia is unparalleled anywhere else in the developed world,” Cummings said at a press event in Canberra. “The chain supermarkets often have a monopoly in a local market or they share it as a duopoly. They have no interest in competition. Why would they?”
Cummings added: “In any market, the more people there are offering the goods or services the lower the price to the consumer. Two competitors in a market are not enough. If we don’t do something about hyper-concentration now, we’ll arrive where we’re headed. When Coles and Woolworths have 100% of the market there is no turning back.”
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By GlobalDataThe comments came as the Australian Competition and Consumer Commission studies grocery prices in the country.
The Australian government handed the ACCC the task in January in a bid, it said, to ensure consumers get a “fair deal at the supermarket”.
The ACCC is due to publish its findings in July but Cummings went on to question whether the watchdog was the right body for the job.
“It would appear that the regulator has been sitting in the stands cheering on Woolworths and Coles since 1974 as the growth in market share has been constant and consistent.
“The previous government asked the ACCC to report on petrol pricing and the best the ACCC could do was come up with a report which said not much at all – and that in an industry with, effectively, only four product lines. What will they be able to make of an industry in which a major supermarket might carry 25,000 different product lines?”
